People in Iowa with outdated car insurance would be monitored by a private company for compliance under a bill approved by a House panel.
Members of a Ways and Means subcommittee approved the bill before sending it to a full committee for consideration. The bill would then be available for debate in the House.
The legislation would allow the state Department of Transportation to hire a third party to maintain a database of motor vehicle insurance information. The designated company, which would be awarded the job through a bidding process, would then be allowed to contact a person if records show he or she has outdated insurance information.
The Commerce Committee in the House has already approved the measure. Rep. Guy Vander Linden, R-Oskaloosa and a member of the Ways and Means subcommittee, said he expects it to pass out of the full House.
People with outdated insurance information will have a window of time to reply to the company. If he or she fails to provide up-to-date car insurance information on time, his or her motor vehicle registration will be revoked. The person would then need to get new registration for the car and pay a $100 administrative fee. That fee will be used to help pay for the database program, as well as the road use tax fund if there’s extra money.
The legislation would require insurers to provide their records to the company each month or face a civil penalty of $250 per day.
Supporters said the legislation would lower cases of people driving without car insurance. Lobbyists for several insurance groups said the bill could create a database that incorrectly flags people with car insurance. The insurers also face liability issues if there’s a database breach.
“All the information that can float around in this database is of great concern,” said Bob Skow with the Independent Insurance Agents of Iowa.
Christopher Rants is a lobbyist for Insure-Rite, a Utah-based company that maintains such databases for states including Texas and West Virginia. The company introduced the legislation, but Rants said it would have to go through the bidding process to secure a contract with the state. Rants said the company is open to suggestions from the insurance industry on ways to make the bill stronger.
“We’re happy to work with them. Our goal is to put together a workable system to reduce the number of uninsured motorists in this state,” he said.
If passed, the bill would go into effect at the start of July 2016.
Topics Auto Legislation Iowa
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